Forex Market News
Moody’s cut Japanese sovereign rating from A1 to AA3B which started safe haven flows. The theme for the day really. The downgrade was seen as risk on, so the aversion trade began by reversing previous trends. This saw selling in US$ and stock markets across the globe.
Started in China, whilst it was above 50 (the level that denotes between growth and contraction) it was only just. With the market already in flight from Japan, this accelerated the issue. The only highlight of the session was the UK PMI, which came out stronger, also accelerating the bid on the pound.
Saw very large rebound thanks to the safe haven flow. Gold had a massive $78+ day with oil, copper and iron ore all posting solid gains. VIX too rose as equities got sold off. Obviously those commodity currencies, Loonie/Kiwi/Aussie all ran with it.
Atility increasing as it looks like the market is trying to reverse the recent 5 month bull trend of the US dollar. Makes for tricky trading and there could be a few dead cats bouncing.
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